NEWS - Class Actions

[05/30] McAdams v. Monier, Inc.
In case involving proposed class action under the Consumers Legal Remedies Act (CLRA) and the Unfair Competition Law (UCL) based on alleged failure to disclose that color composition of roof tiles would erode, court's refusal to certify a class is reversed where an "inference of common reliance"--as opposed to requiring a showing of "actual reliance"--may be applied to CLRA and UCL classes.

[05/23] Pastor v. State Farm Mut. Auto. Ins. Co.
In a class action involving tens of thousands of small claims against an insurance company, denial of class certification is affirmed where the necessity of a separate evidentiary hearing for each class member's claim would remove the benefits of class-action treatment since the aggregate expense of the trial would outweigh the value of the small claims.

[05/21] Spry v. Thompson
In the context of the question of what federal Medicaid restrictions apply to a state program providing medical benefits to persons who are not eligible for Medicaid, no waiver from the Secretary of Health and Human Services is necessary for expansion populations not eligible for Medicaid to enable the state to exceed the co-payment and premium limitations applicable to those individuals.

[05/16] Oscar Private Equity Invs. v. Allegiance Telecom, Inc.
Given the lethal force of certifying a class of purchasers of securities enabled by the fraud-on-the-market doctrine, loss causation must be established at the class certification stage by a preponderance of all admissible evidence. An order certifying a securities-fraud class action involving a now-bankrupt national telecommunications provider is vacated where plaintiffs failed to trigger the presumption of reliance provided by the fraud-on-the-market theory.

[05/14] Greenlee County, Arizona v. US
In the context of the Payment in Lieu of Taxes Act, which was enacted to compensate local governments for the loss of tax revenues resulting from the tax-immune status of federal lands located in their jurisdictions and for the cost of providing services related to these lands, the language of 31 U.S.C. section 6906 limits the government's liability under the Act to the amount appropriated by Congress.

[05/08] Fryar v. Curtis
In a class action brought against correctional officers alleging violation of inmates' state and federal constitutional rights and common law assault and battery, denial of class status and judgment for the one remaining defendant are affirmed where: 1) the remaining plaintiff agreed to proceed against only one defendant, precluding a review of the district court's decision to restrict the suit to that defendant; 2) the district court did not abuse its discretion by foregoing potentially confusing jury instructions and information regarding the procedural history of the case that was not probative of the underlying factual dispute; and 3) any error in the exclusion of an expert report on conditions and training at the prison was harmless.

[05/04] Odom v. Microsoft Corp.
In a putative class action alleging that defendants Microsoft and Best Buy violated RICO via policies and practices related to MSN-subscription Trial CDs and MSN accounts to which consumers were unknowingly subscribed, dismissal of plaintiffs' suit is reversed and remanded where: 1) plaintiffs have sufficiently alleged the existence of an associated-in-fact enterprise within the meaning of 18 U.S.C. sections 1961(4) and 1962(c); and 2) plaintiffs alleged wire fraud with sufficient particularity to satisfy Federal Rule of Civil Procedure 9(b).

[05/03] Gillespie v. Equifax Info. Servs., LLC
In a class action lawsuit alleging violations of the Fair Credit Reporting Act, summary judgment for defendant is reversed where the defendant's credit report was not necessarily clear, as required by the Act, since it recorded multiple dates in the "Date of Last Activity Field," despite the fact that the report may have been accurate.

[05/02] Robert N. Clemens Trust v. Morgan Stanley DW, Inc.
In a class-action suit brought against Morgan Stanley alleging that its brokers recommended to plaintiffs the purchase of unsuitable securities in violation of Section 10(b) of the Securities and Exchange Act of 1934, dismissal of the suit is affirmed where: 1) plaintiffs did not plead facts giving rise to a strong inference of recklessness by Morgan Stanley; 2) plaintiffs abandoned their claims under subsections (a) and (c) of Rule 10b-5; and 3) there was no abuse of discretion in declining to exercise supplemental jurisdiction over state-law claims.

[05/01] Lindsey v. Detroit Entm't, LLC
In a civil rights action brought by individuals who were detained by defendant-casino operator's employees for picking up allegedly abandoned tokens or credits found in defendant's slot machines, denial of class certification and summary judgment for defendant is affirmed as plaintiffs could not demonstrate that defendant's security personnel were licensed under state law, and thus, they could not show that defendant engaged in action attributable to the state for purposes of liability under 42 U.S.C. section 1983.

[04/27] Berenson v. Nat'l Fin. Servs. LLC
In a putative class action suit involving interest earned on funds while delayed in transfer between brokerage accounts, defendants' interlocutory appeal of a denial of a motion to compel arbitration is dismissed for lack of jurisdiction where the district court did not effectively deny defendants' right to arbitrate the dispute when it opined on the merits of the plaintiffs' claims after granting defendants' motion to compel arbitration.

[04/27] Farmers Group, Inc. v. Lubin
In the context of Insurance Code class actions brought by the attorney general on behalf of insurance buyers, the typicality, adequacy, and other prerequisites for all class actions must be applied to the damage claims asserted by an attorney general, rather than to that official personally.

[04/25] Preston v. Tenet Healthsystem Mem. Med. Ctr., Inc.
In a class action involving claims for injuries and deaths allegedly caused by defects and unreasonably dangerous conditions at defendants' medical facilities on the date of Hurricane Katrina, and also alleging a failure to provide adequate transportation, grant of plaintiffs' motion remand their class action lawsuit to state court is reversed where the evidence was insufficient to allow a credible estimate to be made that at least two-thirds of the proposed class members were domiciled in Louisiana at the time of filing the class action, for purposes of the "local controversy" exception of the Class Action Fairness Act (CAFA).

[04/23] Seastrom v. Neways, Inc.
In action for violation of California's unfair competition law, denial of class certification to all purchasers an illegally-sold version of the product BioGevity that contained human growth hormone is affirmed as plaintiffs, as distributors, are potential defendants in the proposed class action, and they have an insurmountable conflict preventing them from fairly and adequately protecting the interests of the class.

[04/20] West v. AK Steel Corp.
In a class action lawsuit brought under ERISA by early retirees in a company's pension plan who elected to receive their pension benefits under the plan in the form of a lump-sum payment, partial summary judgment and an award in favor of plaintiffs is affirmed where: 1) there was jurisdiction under ERISA for the claims; 2) each plaintiff was entitled to have his or her lump-sum distribution reevaluated using a whipsaw calculation, plus interest; 3) there was no error in holding that the plan could not use a preretirement mortality discount in performing the whipsaw calculation; and 4) the Pension Protection Act of 2006 is not retroactive in application, and thus, has no effect on this case.

[04/16] Fireside Bank v. Superior Court of Santa Clara County
In a class action brought against a bank arising out of certain debt collection attempts, a court of appeals' judgment denying bank's challenge to a ruling on the substantive merits of the action is reversed where the trial court abused its discretion in ruling on the merits concurrent with deciding that a class could be certified, but before class notice had gone out.

[04/16] Sanford v. MemberWorks, Inc.
In an action alleging violations of 39 U.S.C. section 3009 and related state law claims arising from plaintiff's purchase of a set of fitness tapes by phone, an order confirming an arbitration award is affirmed in part, and vacated in part where: 1) plaintiff's appeal was timely; 2) the order compelling arbitration was erroneous as the district court failed to rule upon a contract formation issue before compelling arbitration; but 3) dismissal of claims against one defendant was proper as it never mailed unordered merchandise to plaintiff for purposes of section 3009, and there was no abuse of discretion in dismissing state law claims as to that defendant.

[04/10] Cole v. Gen. Motors Corp.
Certification of a nationwide Rule 23(b)(3) class of Cadillac DeVille owners who allege breach of express and implied warranties against General Motors involving side-impact air bag systems is reversed where, due to significant variations in state law and the multiple individualized legal and factual questions they presented, plaintiffs failed to establish predominance for purposes of certification.

[04/10] Brubaker v. Metro. Life Ins. Co.
In a suit by former employees of a company who mistakenly received an offer for a benefit given to certain of the company's retired workers, summary judgment for the defendant-company is affirmed where, even if the erroneous offer could have created an obligation to the plaintiffs, the term "retired," read in context of applicable pension plan documents, did not encompass the plaintiffs.

[03/23] Levy v. State Farm Mut. Auto. Ins. Co.
Orders sustaining demurrer to complaint and granting defendant's motions to strike class action and to dismiss one plaintiff on the grounds of forum non conveniens are affirmed over plaintiffs' claims that they had properly alleged both individual and class claims arising from defendant's practice of omitting certain labor and material costs from its repair estimates, and using its own contracted repair shops in its survey to determine the prevailing competitive repair labor rates included in its estimates.

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